TRB From Washington: The Michael 1 Man

November 4, 1996

Consider two conservative Republicans. Both love to dream up nutty free-market ideas to help the poor, like laptop tax credits for welfare mothers or zero taxes on inner-city capital gains. Both also reject racial wedge issues: One sunk plans to end affirmative action during the last Congress. The other is a longtime supporter of affirmative action who only recently hedged. The first is Newt Gingrich, whose very name terrifies most liberals into writing a large check to Bill Clinton. The second is Jack Kemp, who routinely sends lefty types into paroxysms of cooing approval.

It's not unusual for politicians to win admirers on the other side of the aisle, but usually this crossover appeal is reserved for moderates like Howard Baker or Sam Nunn, whose bipartisan popularity comes at the expense of ill will from their own hard-liners. Somehow Kemp has both won over the GOP's right wing (social and economic conservatives, a feat in itself) and made himself every liberal's favorite Republican. "He puts principle over party," effuses Harlem Democrat Charles Rangel. "I don't think of him as a Republican."

How, in a shrill partisan season, has Kemp become all things to all people? By cultivating a reputation as a floating intellectual, beholden only to ideas. "a passion for ideas," gushed the headline of a New York Times profile of the vice presidential nominee, the day after he joined the ticket. Journalists marvel at his interest in, as Newsweek put it, "the theories of supply-side economics, policy innovations like urban enterprise zones and unfashionable nostrums like putting the U.S. dollar back on the gold standard." This "counterintuitive" mix, as Time cheered, makes it, in the Washington Post's words, "difficult to fit him into the traditional ideological categories."

But Kemp's set of ideas isn't idiosyncratic. It isn't even a set of ideas. It's one basic idea, and Kemp is the first to admit he didn't think it up himself. In fact, no American politician is easier to categorize than Jack Kemp.

Supply-side economics, to which Kemp adheres, is more than a strong belief in cutting taxes or even a belief that tax cuts raise tax revenues. It's tax rates as the unicausal explanation for world history. Consider the following passage from The Way the World Works, the supply-side bible by Jude Wanniski, who converted Kemp:

Although he left the explicit tax rates high ... the economy expanded, but in so distorted a fashion that it compressed the tension between agriculture and industry into an explosive problem that Hitler sought to solve through Lebensraum, or conquest.

This kind of crankery is exemplified by cartoonist Matt Groening's "singletheory-to-explain-everything maniac," who asserts, "The nation that controls magnesium controls the universe!" Magnesiocentrism is only slightly less plausible than the supply-side creed; and if magnesium subsidies had the political appeal of tax cuts the idea would no doubt be embraced by a major political party. Supply-siders have developed a network of editorial writers and quasi-economists devoted to wedging the square peg of world events--Reagan's deficits, the absence of a depression following Clinton's tax hike--into the round hole of their theory.

This entails a complex web of corollaries to which all true believers subscribe. Some, like enterprise zones, have a clear connection to tax-rate determinism. Weirder spin-offs like the gold standard have some mystical connection. (In his book The Seven Fat Years, Wall Street Journal Editor Bob Bartley attempts to explain the gold standard by recounting a session at Michael 1, the posh Wall Street restaurant where the original supply-siders consorted. Arthur Laffer drew him a diagram showing that the money supply couldn't control monetary demand. Ahhh!)

In his book, Wanniski describes Kemp as "ripe for conversion when I met him early in 1976." Conversion is the word of choice for luring new sheep into the supply-side fold. "You have to really believe in it to get converts," Wanniski told me. "You're going up against a whole universe." Since the Michael 1 crowd--of which Wanniski was a charter member--rejects standard economics and history, converts accept the canon whole cloth or not at all. Wanniski can't think of a single issue on which he and Kemp disagree. The two have spoken virtually every day since the conversion, usually several times a day. (In fact, Kemp phoned during Wanniski's interview cum monologue with me.) "He'd call me up at 8:00 in the morning," he recalls, "saying, `I've finished the book, send me another one.'"

Suppose that twenty years ago Wanniski kidnapped Kemp and reprogrammed his brain, Manchurian candidate-style, to carry out his will. A brief look at Kemp's career makes this theory eerily plausible. Start with Kemp's late endorsement of Steve Forbes during the GOP primary. Forbes jumped into the race, at Wanniski's behest, to induce Bob Dole to support the flat tax, a supplyside fetish. At first Kemp remained neutral, hoping Dole would co-opt the idea. After Dole impugned it, Kemp endorsed Forbes. Once Dole advocated a huge tax cut and a future flat tax, Kemp joined the ticket.

Dole has since soft-pedaled the tax cut and tried to divert Kemp into hounding the president about his character. But Kemp is following another master. During his debate with Al Gore, he compulsively cited tax cuts as the solution to problems such as affirmative action, defense, regulation and phlegmatic baseballer Roberto Alomar. When asked about Bosnia, Kemp criticized the administration for bombing Iraq. But Dole's position is that Clinton is too soft on Saddam. Lo and behold, Wanniski had pushed that same line in our interview two weeks before.

Even Kemp's famed concern for the downtrodden is an outgrowth of his tax-cutting evangelism. Kemp loves the urban poor because he thinks he has found their salvation: the only thing keeping ghetto youth from entrepreneurship is the fear that they'll grow rich and, decades later, have to pay capital gains taxes. Inner-city politicians prefer this story to standard conservative analysis because it doesn't hold the poor responsible for their own condition.

His urban supporters hoped his tenure as secretary of Housing and Urban Development would revitalize the department. While the job proved a bully pulpit for Kemp's notions, his insistence on tax-cutting dogma doomed them to legislative oblivion. Once HUD no longer served his career he lost interest in its existence, calling for its abolition in 1994. Ditto affirmative action and immigration, which Kemp turned against when presented with the chance to run for vice president on a supply-side platform.

Kemp views all ancillary social issues as mere tactical compromises. Inevitably they peel away, and all that remains is the Michael 1 man.